Today Apple Computer won the class-action anti-trust case filed against them. The plaintiffs were seeking a billion dollars in damages (after tripling) for a DRM system (Fairplay) that does not exist any more used on a device (the iPod) that Apple has pretty much phased out. These products were such a threat to the survival of competitors that they don't even exist any more. This is not atypical of how anti-trust often plays out in the marketplace, particularly in the technology sphere. Any day now I will be filing my lawsuit against Commodore for suppressing competition in the home computer market.
Posts tagged ‘lawsuit’
As I wrote last week, one encountered a terrible problem when switching from iPhone to Android -- your phone number remained registered with the Apple iMessage servers as an iPhone and so that Apple tries to deliver texts from other iPhones to your new Android phone via their iMessage servers. That does not work, and so the text just disappears into the ether, with the sender thinking it went through fine but the new Android user never seeing it.
After months and months of problems, and at least one class action lawsuit, Apple now offers a fix. You can now de-register your phone number in the iMessage system by going to this link. I don't know if it works and I don't know if there is any time delay. I suddenly started receiving my texts from iPhones this weekend, about a week after I made the switch and called Apple to de-list me in their servers.
By the way, I tried to use the de-listing link. The process involves a text back. I never got a text back, lol. So I am not positive the de-listing link is actually working, but since I was successful (apparently) with it last week doing it using the old method, I am not worried. I was successful using the method at the bottom of this page.
Well, I just switched from my old iPhone 4 to a Droid Turbo**, a Motorola phone that runs Android rather than iOS.
Here is what they never tell you -- Apple has devised a very clever way to make leaving the iOS world really, really painful. Specifically, when you send a text message on an iPhone, unless you fiddled with the default settings, it gets sent through iMessage and the Apple servers. If it is going to another iPhone, it can actually bypass the carrier text messaging system altogether, a nice perk back when texts were not unlimited but useful today mainly for international travel.
But here is the rub -- when you switch you phone line away from an iPhone to an Android device, the Apple servers refuse to recognize this. They will think you still have an iPhone and will still try to send you messages via the iMessage servers. What this means in practice is that you can send messages from the new phone to other iPhones, but their texts back to you will not reach you. They just sort of disappear into the ether, and will try forever to be delivered to your now non-existent iPhone.
This is as good a guide as I can find for the problem, and better than what any Apple employee will tell you. There are two solutions for this. Apparently, you can go to every one of your friends and tell them to delete every text they ever sent you and delete you from their phone books and apparently new texts they send you will then skip the iMessage system and get to your phone. The only problem is that I can't replicate this. I spent hours with my family's iPhones today removing every text message from my number and every reference to me in their phone books. But no dice. Their texts still do not reach me. Sigh.
The second solution is to call Apple and ask to have your number removed from the iMessage servers. This was not possible even a few months ago, but there is a large class action lawsuit against Apple on this topic so they seem to at least have trained their customer service staff on this issue, finally. I called and they readily removed me from the server, but with this caveat -- it wouldn't take effect for 30 days. I told the rep that this was patently absurd, and she agreed. But 30 days it will be. So no matter what I do, every single person in my contact list who has ever texted me from an iPhone is going to think they are texting me but in fact have their texts fly off into the ether. For 30 days.
This is clearly absurd, and folks thinking of switching to Apple should understand just how hard it is to reverse that decision.
PS- I have always been amazed at all the goodwill Apple gets for being somehow friendlier and more open to creative individuals than Microsoft. To me, Apple's philosophy is to host a closed totalitarian world, while Microsoft and Google (admittedly full of foibles and their own issues) have far more open platforms. Linux guys will laugh at that, but compared to Apple, Microsoft is free love in the park.
** reasons why: I live in the Google world of Google Drive and Apps, so the OS choice is a natural. I have never figured out iCloud. I don't care about design elegance, which is good because this phone is as elegant as a brick. It has a stupid large battery (it may be a tad heavy but it is way lighter than with all you guys that have mophie battery cases on your iphones). It has fast-charging as well as wireless charging, a good screen, a decent camera, and a fast processor. It also has a light touch on OS add-ons so it is close to stock android without all the overhead of custom skins and it will be among the first phones to get Android updates (solving the #1 problem of Android over iOS, which is the proliferation of versions across handsets and carriers that slows upgrades). The only thing it is missing is a memory expansion card port, though you can get it in 64GB which always has been plenty for me. The only question left is why carriers have to design their phones, these $600 devices that can't be dropped, with super-slick back covers. The new HTC One M8 is like holding a bar of wet soap. They all do this, except the Moto X which has a bamboo back that is awesome to hold.
New York City has instituted a draconian "ban the box" law that makes it extremely difficult for employers to avoid hiring people with criminal records (via Overlawyered)
The bill, which is likely to become law in some form, would prohibit the commonly used "check boxes" on job applications that ask about past convictions. It also would forbid employers from asking questions about an applicant's criminal history until a conditional job offer has been tendered....
The bigger concern is lawsuits from job seekers. To be able to reject an applicant because of a past conviction, employers would have to go through a rigorous process that, if not followed, would result in the presumption that a business owner engaged in unlawful discrimination, Mr. Goldstein said.
“I think you’d see some increases in litigation, and this is not exactly a well-settled area of law,” he said.
Proponents say the bill would simply offer a clearer way for businesses to follow state law requiring employers to go through a multistep test to determine if an applicant's past criminal behavior correlates with the position being sought.
Additionally, the City Council bill would allow an applicant rejected because of a past crime seven days to respond. The job would have to be held open during that time.
An employer's failure to adhere to the process could lead to a fine of at least $1,000. In the bill's current form, the business would bear the burden of proof in any resulting lawsuit by the job applicant, Mr. Goldstein said.
“Rather than the normal context, we have the burden here shifting,” he said. “It would be on the employer to present clear and convincing evidence that it had not engaged in unlawful discrimination.”
Given that the burden of proof seems to be on businesses in employee lawsuits even when the playing field is supposed to be level, I shudder to think what a statutory burden of proof would mean. Likely an automatic win for any employee.
Given this, here is a question for you: Imagine that I hired a convicted felon who then committed a crime against one of my customers. Would I be shielded from liability because I had limited ability to screen out candidates who posed dangers to customers? HA! No way. The plaintiff's attorney for the customer would be in front of the jury making me look like Attila the Hun for not screening felons from my applicant pool, even as the government made that task effectively impossible.
That is the key to this law -- that proponents can claim that one can screen out felons "if appropriate to the job" but in fact the law makes it effectively impossible to do so without imposing staggering litigation costs on me. So we get the Leftist ideal - I can be sued by employees for screening out felons and I can simultaneously be sued by customers for not screening out felons.
Congress has ceded far, far too much legislative power to Administration agencies like the EPA. The only check that exists for that power is process -- regulators have to go through fairly elaborate and lengthy steps, including several full stops to publish draft rules and collect public comment. A lot of garbage gets through this process, but at least the worst can be halted by a public or Congressional outcry to draft rules.
But like most government officials, regulators resent having any kind of check on their power. Just like police look for ways to conduct searches without warrants, and even the President looks for ways to rule without Congress, the EPA wants to regulate unfettered by public comment process.
The EPA has found a clever and totally scary way around this. In short, they collude with a friendly environmental group which sues the EPA seeking certain rules that the EPA believes to be too controversial to survive the regulatory process. The EPA settles with the friendly group, and a consent decree is issued imposing the new rules, entirely bypassing any rules-making or public comment process. The EPA then pretends that they were "forced" into these new rules, and as a kicker, the taxpayer funds the whole thing by making large payoffs to the environmental group who initiated the suit part of the settlement. Larry Bell describes the process:
“Sue and settle “ practices, sometimes referred to as “friendly lawsuits”, are cozy deals through which far-left radical environmental groups file lawsuits against federal agencies wherein court-ordered “consent decrees” are issued based upon a prearranged settlement agreement they collaboratively craft together in advance behind closed doors. Then, rather than allowing the entire process to play out, the agency being sued settles the lawsuit by agreeing to move forward with the requested action both they and the litigants want.
And who pays for this litigation? All-too-often we taxpayers are put on the hook for legal fees of both colluding parties. According to a 2011 GAO report, this amounted to millions of dollars awarded to environmental organizations for EPA litigations between 1995 and 2010. Three “Big Green” groups received 41% of this payback, with Earthjustice accounting for 30 percent ($4,655,425). Two other organizations with histories of lobbying for regulations EPA wants while also receiving agency funding are the American Lung Association (ALA) and the Sierra Club.
In addition, the Department of Justice forked over at least $43 million of our money defending EPA in court between 1998 and 2010. This didn’t include money spent by EPA for their legal costs in connection with those rip-offs because EPA doesn’t keep track of their attorney’s time on a case-by-case basis.
The U.S. Chamber of Commerce has concluded that Sue and Settle rulemaking is responsible for many of EPA’s “most controversial, economically significant regulations that have plagued the business community for the past few years”. Included are regulations on power plants, refineries, mining operations, cement plants, chemical manufacturers, and a host of other industries. Such consent decree-based rulemaking enables EPA to argue to Congress: “The court made us do it.”
One of my favorites writers Megan McArdle comments on my post about the regulatory excess in California. The same post was linked by Reason as well. The Reason post got the attention of Ron Paul, who will be interviewing me for his radio show next week.
I posted a few updates on the article today:
Wow, reading this again, I left out so much! An employee once sued us at this location for harassment and intimidation by her manager -- when the manager was her sister! It cost me over $20,000 in legal expenses to get the case dismissed. I had an older couple file a state complaint for age discrimination when they were terminated -- despite the fact that our entire business model is to hire retired people and the vast majority of our employees are 70 and older. And how could I have forgotten the process of getting a liquor license? I suppose I left it out because while tedious (my wife and I had to fly to California to get fingerprinted, for example), it is not really worse than in other places -- liquor license processes are universally bad, a feature and not a bug for the established businesses one is trying to compete with. We gave the license up pretty quickly, when we saw how crazy and irresponsible much of the customer base was. Trying to make the place safer and more family friendly, we banned alcohol from the lake area, and faced a series of lawsuit threats over that.
Congress is considering adding gays and lesbians to the list of protected groups covered by the EEOC. As former chairman of a group that tried to get gay marriage legalized in Arizona (at least until we were shot down by gay rights groups that did not want libertarians or Republicans helping to lead the effort), I hope I don't have to prove that I have no problem with differences in sexual orientation. But I have a big problem with Federal employment discrimination law.
If you are unfamiliar with how it works, this is perhaps how you THINK it works: An employee, who has been mistreated in a company based on clear prejudice for his or her race / gender / sexual orientation, etc. has tried to bring the problem to management's attention. With no success via internal grievance processes, the employee turns finally to the government for help.
Ha! If this were how it worked, I would have no problem with the law. In reality, this is how it works: Suddenly, as owner of the company, one finds a lawsuit or EEOC complain in his lap, generally with absolutely no warning. In the few cases we have seen in our company, the employee never told anyone in the company about the alleged harassment, never gave me or management a chance to fix it, despite very clear policies in our employee's manuals that we don't tolerate such behavior and outlining methods for getting help. There is nothing in EEO law that requires an employee to try to get the problem fixed via internal processes.
As a result, our company can be financially liable for allowing a discriminatory situation to exist that we could not have known about, because it happened in a one-on-one conversations and the alleged victim never reported it.
What I want is a reasonable chance to fix problems, get rid of bad supervisors, etc. A reasonable anti-discrimination law would say that companies have to have a grievance process with such and such specifications, and that no one may sue until they have exhausted the grievance process or when there is no conforming grievance process. If I don't fix the problem and give the employee a safe work environment, then a suit is appropriate. The difference between this reasonable goal and the system we actually have is lawyers. Lawyers do not want the problem to be fixed. Lawyers want the problem to be as bad as possible and completely hidden from management so there is no chance it can be fixed before they can file a lucrative lawsuit.
I worry in particular about how this will play out with a new gay/lesbian discrimination law. We have employed a number of gay couples over the years, and never had any particular internal issue (I had to defend one couple in Florida from a set of customers who thought that it was inherently dangerous to employ gay people around children camping, but I did so gladly). But I know I have employees who have religious beliefs different form my own such that they think gay people are damned, evil, whatever. So now what do I do when I have one of these religious folks in conflict with an employee who is gay? If I don't separate them, I am going to get sued by the gay person for a hostile work environment. If I move the gay person, I will get sued for gay discrimination. If I move or fire the religious person, I will get sued for religious discrimination.
I am happy to work hard to build a respectful, safe work environment, but such laws put me as a business owner in no-win situations. And the lawyers who craft this stuff consider this a feature, not a bug. Heads I sue you, tails I sue you.
The Competitive Enterprise Institute has been all over the shutdown of private businesses that take no money from the Federal government, but have been closed by the Administration none-the-less. The Daily Caller has an article up that includes some quotes from yours truly
During the government shutdown, the Obama administration has forced the closure of privately owned parks, stoking calls from lawyers for park owners to take legal action against the federal government.
“As a lawyer who once worked for the government, I assume there is no legal authority for this because these private tourist attractions were not shut down in prior ‘government shutdowns,’ even under Bill Clinton, who understood how to play political hardball,” Hans Bader, senior attorney at the Competitive Enterprise Institute wrote in an email.
A lawyer with the conservative Heritage Foundation said that the Obama administration’s actions were likely illegal and that business owners forced to close shop should sue.
“They should immediately file a lawsuit and seek a temporary injunction against the government,” said Former Justice Department lawyer Hans Von Spakovsky.
Which is what we are doing right at this moment. Several other groups are winning similar suits.
Another example (though I am told the Cliff House case was greatly aided by connections they had with Nancy Pelosi).
You may be wondering under what authority the government is taking actions during the government shutdown. We had a meeting with the Chief of the US Forest Service on Friday. This is the specific text the Administration is using to justify all of its shutdown actions
(a)(1) An officer or employee of the United States Government or of the District of Columbia government may not—
(A) make or authorize an expenditure or obligation exceeding an amount available in an appropriation or fund for the expenditure or obligation;
(B) involve either government in a contract or obligation for the payment of money before an appropriation is made unless authorized by law;
(C) make or authorize an expenditure or obligation of funds required to be sequestered under section 252 of the Balanced Budget and Emergency Deficit Control Act of 1985; or
(D) involve either government in a contract or obligation for the payment of money required to be sequestered under section 252 of the Balanced Budget and Emergency Deficit Control Act of 1985.
I will leave it as an extra credit exercise for the reader to explain how this text justifies either a) spending extra money to barricade war memorials on the Washington Mall or b) closing privately-funded parks that take not a single dime of government money. All these tests have everything to do with limiting government expenditures, not limiting citizen access to public lands.
We had some delays (in part because the government is taking a holiday from the shutdown today, so everything is REALLY closed) but we file our lawsuit seeking a temporary restraining order on the US Forest Service in the morning.
Walter Olson has an article on three recent 5-4 decisions where we narrowly avoided Supreme Court rulings that would have further separated liability as a business owner from actual bad actions. This one in particular resonates with me:
Vance raised the question of who counts as a “supervisor” for purposes of harassment liability. Under existing Court precedent, employers are more or less automatically liable when a “supervisor” engages in harassment. When it’s a co-worker, they are still frequently liable – e.g., if they have received a complaint about it but not fixed things, or if they have negligently allowed the situation to develop – but liability isn’t as close to automatic. As all Justices recognized, however, the old model of a workplace with a military-like chain of command is fast giving way to newer models in which it is extremely hard to tell who is supervising whom, and in particular work orders (“Here, do this for me.”) can issue in multiple directions, not just from “up” to “down.” The four liberal justices were happy to blur the lines by saying that the more people are doing supervisor-like things, the more employees’ misconduct will be imputed automatically to the employer with no chance for it to raise counterarguments that it had acted properly. The majority led by Justice Alito more reasonably recognized that the ability to take tangible employment actions against a co-worker is a better test of “supervisor” than the ability to ask them to undertake some work responsibility.
Last year I got sucked into a lawsuit where an ex-employee, after her termination, sued our company for allegedly racist remarks another employee made about her husband. The lawsuit was the first we ever heard about the alleged incident -- it was never reported to me or any other manager or employee, it was behavior that was banned by our policies and training, and we never (obviously) had a chance to make any corrections. The litigant tried to argue that the person who made the alleged remarks was "supervisory" because she had sometimes been asked to draft a shift schedule for the manager.
We eventually had this dismissed, but it cost us $25,000 in legal fees to make it go away. It was particularly frustrating given that if this had ever been raised as an issue to me, it would have been investigated and heads would have rolled if necessary. This whole notion of having liability even when operating to the highest standards is just terrifying. And four Supreme Court justices tried to make all this irrelevant, essentially linking my liability to the standards and intelligence of whoever is my weakest employee.
A Colorado jury has awarded $11.5 million in a lawsuit originally brought against helmet maker Riddell and several high school administrators and football coaches over brain injuries suffered by a teenager in 2008.” While the jury rejected the plaintiff’s claim of design defect, it accepted the theory that the helmet maker should have done more to warn of concussions.
If the helmet makers are getting nailed, wait until every high school and college in the country is sued, not to mention the massive suit looming against the NFL. Expect to see a debate soon, beginning in state legislatures, over tort protection for football. Texas, for example, has several of the country's tort hellholes but if Friday night high school football is threatened, you can bet that the legislature will be moved to action.
I think Megan McArdle is being naive about the tort system in this country when she writes
So Junior Seau's family is suing the NFL over head injuries, which lead to chronic brain damage, and possibly his suicide.
But this lawsuit strikes me as pretty out there. Junior Seau can't possibly have been unaware that football caused head injuries. Nor even that multiple concussions are probably bad for you. Note how many people are still playing, even though we now know this all too well.
Really? I know of cases where people have successfully sued for drownings that occurred within feet of a no swimming sign. I could easily ask if there are really people unaware that water can cause drownings. Any sense of individual responsibility has been stripped from the tort system, such that it has become a way for folks who had bad outcomes of some sort to cash in from deeper pockets, irrespective of any reasonable sense of justice.
The NFL knows this and is clearly running scared. How do we know? Just look at Saints coach Sean Payton, who just went back to work after a one year suspension, a historically really large penalty for a coach. He was accused of tangential association with a bounty system players and coaches had in place for great plays that may also have been a bounty system for injuring opposing players. The NFL knows this goes on all the time, but must now prepare for the day they are in court getting sued for having an unsafe work environment. They do not want a case based on negligence to be made far worse by accusations that the league was actively promoting behavior that created injuries. So they threw the book at him. The other folks who were suspended threatened the NFL with suits for all sorts of due process errors, but the NFL didn't care. They can survive a judgement on an unjustified suspension of one or two players. They cannot survive a judgement on causing hundreds to have brain damage.
Quoting from Walter Olson, who spends most of his time studying the tort system in this country:
if subjected to the same injury liability rules that American courts apply to other businesses, organized football is unlikely to survive.
This story is simply unbelievable. Shareholders of AIG should have been wiped out in 2008 in a bankruptcy or liquidation after it lost tens of billions of dollars making bad bets on insuring mortgage securities. Instead, AIG management and shareholders were bailed out by taxpayers.
It is bad enough I have to endure those awful commercials with AIG employees "thanking" me for their bailout. It's like the thief who stole my TV sending me occasional emails telling me how much he is enjoying it.
Now, AIG managers and owners are considering suing the government because the the amazing special only-good-for-a-powerful-and-connected-company deal they got was not good enough.
Directors at American International Group Inc., AIG -1.28% the recipient of one of the biggest government bailout packages during the financial crisis, are considering whether to join a lawsuit that accuses the U.S. government of too-onerous terms in the 2008-2009 rescue package.
The directors will hear arguments on Wednesday both for and against joining the $25 billion suit, a person briefed on the matter said. The suit was filed in 2011 on behalf of Starr International Co., a once very large AIG shareholder that is led by former AIG Chief Executive Maurice "Hank" Greenberg. It is pending in a federal claims court in Washington, D.C....
Starr sued the government in 2011, saying its taking of a roughly 80% AIG stake and extending tens of billions of dollars in credit with an onerous initial interest rate of roughly 15% deprived shareholders of their due process and equal protection rights.
This is especially hilarious since it coincides with those miserable commercials celebrating how AIG has successfully paid off all these supposedly too-onerous obligations. And certainly Starr and other AIG investors were perfectly free not to take cash from the government in 2008 and line up some other private source of financing. Oh, you mean no one else wanted to voluntarily put money into AIG in 2008? No kidding.
Postscript: By the way, employees of AIG, you have not paid off all the costs of your bailout and you never will. The single largest cost is the contribution to moral hazard, the precedent that insurance companies, if sufficiently large and well-connected in Washington, can reap profits on their bets when they go the right way, and turn to the taxpayer to cover the bets when they go wrong.
JP Morgan finds itself under the government microscope for having heartlessly... cooperated with the government four years ago
The U.S. Department of Justice and New York Attorney General Eric Schneiderman teamed up last week to sue J.P. Morgan in a headline-grabbing case alleging the fraudulent sale of mortgage-backed securities.
One notable detail: J.P. Morgan didn't sell the securities. The seller was Bear Stearns—yes, the same Bear Stearns that the government persuaded Morgan to buy in 2008. And, yes, the same government that is now participating in the lawsuit against Morgan to answer for stuff Bear did before the government got Morgan to buy it....
As for the federal government's role, it's helpful to recall some recent history: In the mid-2000s, Bear Stearns became—outside of Fannie Mae and Freddie Mac—perhaps the most reckless financial firm in the housing market. Bear was the smallest of the major Wall Street investment banks. But instead of allowing market punishment for Bear and its creditors when it was headed to bankruptcy, the feds decided the country could not survive a Bear failure. So they orchestrated a sale to J.P. Morgan and provided $29 billion in taxpayer financing to make it happen.
The principal author of the Bear deal was Timothy Geithner, who was then the president of the Federal Reserve Bank of New York and is now the Secretary of the Treasury. Until this week, we didn't think the Bear intervention could look any worse.
Somewhere there was a legal department fail here - I can't ever, ever imagine buying a company with Bear's reputation that was sinking into bankruptcy without doing either via an asset sale or letting the mess wash through Chapter 7 so there could be an old bank / new bank split. But Bank of America made exactly the same mistake at roughly the same time with Countrywide, so it must have appeared at the time that the government largess here (or the government pressure) was too much to ignore.
I have mixed feelings about Groupon. Having been an executive at Mercata 10+ years ago, I recognize that they have gotten further than we did with the group buying model by a) waiting for there to actually be social media and b) delivering electronic goods (coupons) rather than hard goods. As a customer, I have satisfactorily participated in several groupons and as a business we have used it a couple of times as a promotional program. As an investor, I was short Groupon for quite a while, convinced that they had no particular barrier to entry for competitors like Amazon who could grab the market if there was enough money at stake.
So, all that aside, I was fascinated by the recent settlement of a class action lawsuit. Prior to the lawsuit, all customers could get a full refund of their Groupon through a simple contact with Groupon customer service. After the lawsuit, customers during the class action period can only get a partial refund and then only by going to a separate class website and hassling with forms and doing a lot of waiting. The plaintiffs will actually get less than they would have had the lawsuit not gone forward, the difference being the millions required to pay off the tort lawyers to go away.
Having just had to pay the fees of a tort lawyer who brought a frivolous suit against our company just to make him go away, I am sympathetic. Had the plaintiff approached me directly, I might have given her a few bucks just to settle and avoid getting lawyers involved. But instead the lawyer got part of his fees paid in the settlement and the plaintiff got zip. Basically just legal blackmail, with the plaintiff as unpaid pawn.
Several sites have reposted this Craigslist ad, gasping in shock at it as evidence of massive foreclosure fraud
We are a collection agency/debt buyer. What we are looking for is a part time attorney to work for us as our corporate counsel, on our payroll, about 5 to 6 hours a week. This is a short term employment arrangement, no longer than 90 to 120 days.
Your job will be to sign pleadings, praecipe for entry of appearances, praecipe for writ of execution, and garnishment orders. Our paralegal will prepare all paperwork for your signature. This is very standard stuff for us.
If you are an attorney looking for challenging legal work, this is not for you. WE DO NOT NEED F LEE BAILEY- we are fee shopping. If you passed your boards with a D+, and you can sign your name, you possess all the credentials required for this job. If this opportunity interests you, please feel free to reply to this email with a brief description of who you are, when you got your law license, and what you will be needing from us in the way of compensation.
I would instead offer it as a lesson in the stupidity of state-enforced professional licensing arrangements. Let me rewrite it:
We have all the legal knowlege we need. We know exactly what the forms look like and mean. We have written all the documents and tested them over time during our long presence in this business and we know them to meet our legal needs. We have no need, in other words, for legal help.
However, attorneys have gotten together and created an attorneys guild, and, what's more, have convinced the government to pass laws that require membership in the guild to perform certain gate-keeping functions. In our case, we need a member of the guild to sign some forms to make them legal, both because the guild has strong influence and because certain folks have convinced everyone that all mortgage pain in this country came from having a machine perform this signature function rather than a flesh and blood hand. So we need a flesh and blood hand rather than a machine to sign foreclosure documents. Unfortunately, that hand has to be attached to a brain that has passed the bar exam, and because the guild is pretty good at limiting its membership, we expect to have to pay an absurd amount of money for this trivial function that could be duplicated by a six-year-old (and used to be performed by a simple $100 machine).
Don't get us wrong -- if we were on trial for our lives or facing a nasty, complicated lawsuit or wanted to draft a custom contract to protect our interests, we would be very happy to consider the opinion of third party licensing groups as to the merit of a particular attorney. Ironically, though, even then current licensing would be absurd, for in this case it would not greatly exceed our quality requirements (as it does for signing our foreclosure paperwork) but it would vastly undershoot our need due diligence needs. Perhaps there is some legal function for which attending an ABA-accredited school and passing the bar exam is the perfect level of quality assurance, but we have not found it yet.
I hate excerpting Ken at Popehat in times like this, because I simply love reading all his prose and hope you will do so as well rather than settling for the excerpt only. I love Neal Stephenson's Cryptonomicon not because it is his best story (it's not) but because it has some of his best prose. Six pages on eating Cap'n Crunch and ten or so on getting a wisdom tooth extraction, and I was left begging for more. Ken is my blogging equivalent. I could read a whole book just with Ken calling out censorious lawyers for threatening bloggers to try to shut them up.
See, a legal threat like the one Charles Carreon sent — "shut up, delete your criticism of my client, give me $20,000, or I'll file a federal lawsuit against you" — is unquestionably a form of bullying. It's a form that's endorsed by our broken legal system. Charles Carreon doesn't have to speak the subtext, any more than the local lout has to tell the corner bodega-owner that "protection money" means "pay of we'll trash your shop." The message is plain to anyone who is at all familiar with the system, whether by experience or by cultural messages. What Charles Carreon's letter conveyed was this: "It doesn't matter if you're in the right. It doesn't matter if I'm in the wrong. It doesn't matter that my client makes money off of traffic generated from its troglodytic users scraping content, and looks the other way with a smirk. It just doesn't matter. Right often doesn't prevail in our legal system. When it does, it is often ruinously expensive and unpleasant to secure. And on the way I will humiliate you, delve into private irrelevancies, harass your business associates and family, disrupt your sleep, stomp on your peace of mind, and consume huge precious swaths of your life. And, because the system is so bad at redressing frivolous lawsuits, I'll get away with it even if I lose — which I won't for years. Yield — stand and deliver — or suffer."
Our system privileges Charles Carreon to issue that threat, rather than jailing or flogging him for it. And so Carreon supports bullying like that. He's got a license to do it. He knows that his licensed threats — coming, as they do, on the [slightly odd] letterhead of a lawyer — inspire far more fear and stress than the complaints of a mere citizen, and by God he plays it to the hilt.
By contrast, Charles Carreon doesn't like shows of force that you or I can muster. "I'm completely unfamiliar really with this style of responding to a legal threat," he sniffs. There's a whiff of Paul Christoforo of Ocean Marketing in there — the sentiment "how was I to know that I was picking on someone stronger than I am? Is that fair?" But what he means is "if the people I threaten don't have to dig into their pockets to go hire a lawyer, and spend unpleasant hours with that lawyer, and lay awake at night worrying, and rely on a lawyer who is part of my privileged culture, but can stand up for themselves . . . how can I intimidate them so easily?" Perhaps some rude Oatmeal followers did actually send true threats or abuse to Charles Carreon's office — which I condemn. That's morally wrong and not helpful to the cause of free speech; it's harmful. But I fail to see why Charles Carreon sending that threat letter is more legitimate, admirable, or proper than ten thousand Oatmeal fans sending back the message that Charles Carreon is a petulant, amoral, censorious douchebag. It doesn't take lawyers, it doesn't take law school, it doesn't take any special privilege conferred by the state — it only takes a robust right of free expression — sending it back by blogging it, tweeting it, posting it on Facebook, and posting it in comments on forums. Charles Carreon has power derived from an inadequate legal system and letters of marque from the State Bar; The Oatmeal has the power of goodwill and community respect earned by talent. There's no reason to exalt Carreon's power and condemn The Oatmeal's.
Read it all. The Oatmeal's response is also classic.
The Workers' Compensation Insurance Rating Bureau (WCIRB) made it official and submitted a mid-year filing for a 9.1% increase in the pure premium advisory rate that Insurance Commissioner Dave Jones approved less than six months ago. The proposed July 1 increase follows the 37% increase that Jones approved for January 1 that was hidden by the change in benchmarks for pure premium rates that was made at his request....
The Bureau insists that an increase of this magnitude is necessary to combat the continued deterioration in the claims experience, as well as an uptick in claim frequency in the 2010 accident year. Much of the increase will also go to pay for the higher loss adjustment expenses carriers are incurring fighting liens and litigating permanent disability claims. Projected ALAE costs are up to $11,403 per indemnity claim for the 2011 accident year compared to $10,698 the year before.
A 9.1% increase a half year after a 37% increase is just crazy. This tends to confirm three issues I have written about before:
- People are filing workers comp claims as a substitute for or a supplement to unemployment. Our company has seen a significant increase in people "coincidentally" suffering an injury on one of the last few days, and particularly the very last day, before they are to be laid off. Only such fraud explains an increase in claims when economic activity is way down, particularly when more dangerous professions like construction employment fell much more than office employment in the recession. We have also seen, by the way, an increase in frivolous labor lawsuits in CA coincident with the economic decline. A year ago I had an employee in CA tell me that she had attended a brainstorming session the night before among several of my ex-employees trying to generate ideas for ways to sue our company. I can't wait for an improvement in the economy when the returns of working are higher than the returns of brainstorming ways to extract money from our company via the legal system.
- California in general does a bad job of policing workers comp. fraud. Woe to the employer that actually attempts to question an outrageously suspicious claim. Last time I tried to do so in CA I got slapped with a lawsuit.
- All states do a terrible job policing permanent disability claims. I hire a lot of older workers. I can't tell you how many people show up at my door trying to be paid under the table because they don't want to endanger their permanent disability by having a record of getting paid for doing very physical outdoor work for us. They assure me they are 100% capable to do heavy physical labor. Since I don't pay anyone off the books, they end up finding work elsewhere. Many of you may not believe such people exist, but I have met a number of folks who consider getting a permanent disability, or at least something a doctor will testify is a permanent disability, the equivalent of hitting the lotto. I have even been sued by a woman for submitting testimony to the social security administration that might have harmed her chances of getting a permanent disability ruling. The lawsuit stated that if she was denied the disability payment after I testified that I had seen no evidence of any limitations in what she could do on the job, that I should be liable for paying her the lifetime amount she would have gotten. So I wimped out and withdrew my testimony and let the taxpayers pay her rather than farting around with a lawsuit.
I grew up in Houston. Around and embedded in Houston are a number of small cities and villages with their own police forces. You generally really, really did not want to encounter these folks. They often hired the dregs of large police forces, preferentially taking the hard cases even the larger forces could not tolerate. I remember the small village next to my high school hired one of the Houston Police officers who beat Joe Campos Torres to death (after Texas courts gave the two leaders of the beating probation and at $1 fine for killing the Vietnam vet). These police forces are famous for their hostility to non-whites.
So it comes as no surprise, but never-the-less with great irritation, to see another such Houston-area independent city (in this case Bellaire) refusing to punish criminal officers who gunned down an innocent man in his own driveway for the apparent crime of driving while black
Cop runs license check on a suspicious vehicle. Although they apparently committed no traffic violation, cop insists that his decision to run a check had nothing to do with the fact that the occupants were black, and happened to be driving in an affluent, predominately white neighborhood. The cop’s partner apparently then enters the wrong license number, which returns a car that had been reported stolen. So cop follows car into driveway, which happens to be the home of the driver’s parents, where he lives. Cop approaches driver and occupant with his gun drawn. Driver’s parents come out to see what’s causing the commotion. Cop roughs up driver’s mother. Driver gets up from ground to tell cop to lay off of his mother. Cop shoots driver, a full 32 seconds after pulling into the driveway.
The driver, who was unarmed, will now carry a bullet in his liver for the rest of his life. The cop was charged with first degree aggravated assault. A jury acquitted him. Now this week, U.S. District Judge Melinda Harmon dismissed the driver’s lawsuit against both the cop that fired his gun and the cop who entered the wrong license plate number, citing qualified immunity. According to Harmon, the officer acted “reasonably,” and moreover, wrongly accusing an unarmed man of stealing a car, pointing a gun at him, then shooting him in the liver, “did not violate [his] constitutional rights.”
Both cops are back on the force. The guy with the bullet in his liver? Tough luck. He’ll be paying his own medical bills.
Eyebrow threading to remove facial hair, a practice which has ancient roots in Eastern countries such as India and Iran, is gaining popularity around the country.
And threaders can now operate freely in the state without a cosmetology license after an October court settlement determined that the Arizona Board of Cosmetology would no longer regulate the trade.
The consent judgment resulted from a lawsuit filed in Maricopa County Superior Court by five threaders, including Gutierrez.
The threaders argued that the Board of Cosmetology was merely trying to help more traditional hair removal outfits remove a source of low-cost competition. The threaders were represented by the IJ, who do great work for economic liberty
As GM was failing, I argued for the normal laws of bankruptcy to be allowed to work. After all, valuable brands and manufacturing facilities were not just going to go *poof* -- someone would purchase them and employ them, and hopefully those someone's would to a better job than the previous owners and managers.
A big part of the "logic" for bailout and Presidential intervention in the auto companies was that auto purchases would halt if consumers were unsure whether their warranties would be honored and service would be available.
Advocates for the nation's automakers are warning that the collapse of the Big Three - or even just General Motors - could set off a catastrophic chain reaction in the economy, eliminating up to 3 million jobs and depriving governments of more than $150 billion in tax revenue.
Industry supporters are offering such grim predictions as Congress weighs whether to bail out the nation's largest automakers, which are struggling to survive the steepest economic slide in decades....
Automakers say bankruptcy protection is not an option because people would be reluctant to make long-term car and truck purchases from companies that might not last the life of their vehicles.
Well, it turns out that this was partially bogus. The written warranties are still honored, but GM argues it left liability for any defects or design problems in the old shell company
General Motors Co (GM.N) is seeking to dismiss a lawsuit over a suspension problem on more than 400,000 Chevrolet Impalas from the 2007 and 2008 model years, saying it should not be responsible for repairs because the flaw predated its bankruptcy.
The lawsuit, filed on June 29 by Donna Trusky of Blakely, Pennsylvania, contended that her Impala suffered from faulty rear spindle rods, causing her rear tires to wear out after just 6,000 miles. [ID:nN1E7650CT]
Seeking class-action status and alleging breach of warranty, the lawsuit demands that GM fix the rods, saying that it had done so on Impala police vehicles.
But in a recent filing with the U.S. District Court in Detroit, GM noted that the cars were made by its predecessor General Motors Corp, now called Motors Liquidation Co or "Old GM," before its 2009 bankruptcy and federal bailout.
The current company, called "New GM," said it did not assume responsibility under the reorganization to fix the Impala problem, but only to make repairs "subject to conditions and limitations" in express written warranties. In essence, the automaker said, Trusky sued the wrong entity.
"New GM's warranty obligations for vehicles sold by Old GM are limited to the express terms and conditions in the Old GM written warranties on a going-forward basis," wrote Benjamin Jeffers, a lawyer for GM. "New GM did not assume responsibility for Old GM's design choices, conduct, or alleged breaches of liability under the warranty."
Of course, this happens all the time in bankruptcy (and it is my experience, but I am not a legal expert) that GM may or may not succeed in this argument. It is not always possible to leave liabilities behind in an old corporate shell, or else companies would reorganize every year.
But the point is that the special treatment of GM was supposed to be to protect consumers, and that turns out to be BS. The warranties were likely always going to be protected in any bankruptcy, as such consumer benefits nearly always are in chapter 11 (the fact that you still hold any frequent flyer miles is proof of this, as nearly every airline in the country has been through chapter 11 in the last couple of decades and none of them disavowed their frequent flyer miles, despite the fact that holders are the most unsecured of unsecured creditors).
...several environmental groups that have received millions in EPA grants regularly file suit against that same agency. A dozen green groups were responsible for more than 3,000 suits against the EPA and other government agencies over the past decade, according to a study by the Wyoming-based Budd-Falen Law Offices.
The EPA even tacitly encourages such suits, going so far as to pay for and promote a "Citizen's Guide" that, among other things, explains how to sue the agency under "citizen suit" provisions in environmental laws. The guide's author — the Environmental Law Institute — has received $9.9 million in EPA grants over the past decade.
And, to top it off, critics say the EPA often ends up paying the groups' legal fees under the Equal Access to Justice Act.
"The EPA isn't harmed by these suits," said Jeffrey Holmstead, who was an EPA official during the Bush administration. "Often the suits involve things the EPA wants to do anyway. By inviting a lawsuit and then signing a consent decree, the agency gets legal cover from political heat."
What do corn farmers and Hollywood studios have in common? They both have an uncanny ability to force self-serving legislation through Congress. This week's bit of sucking up to Hollywood is the PROTECT IP act, currently under consideration in Congress:
An ideologically diverse group of 90 law professors has signed a letter opposing the PROTECT IP Act, the Hollywood-backed copyright enforcement/Internet blacklist legislation now working its way through Congress. The letter argues that its domain-blocking provisions amount to Internet censorship that is barred by the First Amendment.
Jointly authored by Mark Lemley, David Levine, and David Post, the letter is signed not only by prominent liberals like Larry Lessig and Yochai Benkler, but also by libertarians like Post and Glenn "Instapundit"Reynolds.
"The Act would allow courts to order any Internet service to stop recognizing [a] site even on a temporary restraining order... issued the same day the complaint is filed," they write. Such a restraining order, which they describe as "the equivalent of an Internet death penalty," raises serious constitutional questions.
The Supreme Court has held that it's unconstitutional to suppress speech without an "adversary proceeding." That is, a speaker must, at a minimum, be given the opportunity to tell his side of the story to a judge before his speech can be suppressed.
Yet under PIPA, a judge decides whether to block a domain after hearing only from the government. Overseas domain owners (and the speakers who might make use of their websites) aren't offered the opportunity to either participate in the legal process or appeal the decision after the fact. (Affected domain owners may file a separate lawsuit after the fact.) This, the professors say, "falls far short of what the Constitution requires before speech can be eliminated from public circulation."
I was listening to the WSJ radio podcast while getting some dinner ready, and one of their reporters said, in the context of discussing Fukushima, that some of the engineers at the plant "knew there was a risk" in the plant's older design and could conceivably face charges for not doing something about said risk.
This kind of talk really grinds my gears. In any engineering situation there is always some risk. You can have less risk, or more risk, but risk is not something you either have or do not have.
I will go one step further. This ex post facto witch hunt aimed at folks who discussed risks (an pogrom that occurs in nearly every product liability lawsuit with fishing expeditions through company memos) is the WORST possible thing for consumers concerned about the safety of their products and environment. Engineers have to feel free to express safety concerns within organizations no matter how hypothetical these suppositions may be.
Some concerns will turn out to be unfounded. Some suggested risks will be deemed too small to economically overcome. And some will turn out to be substantial and require action. And sometimes well-intentioned people will make what is, in retrospect, the wrong trade-offs with risks. These witch hunts only tend to suppress this very valuable and necessary internal dialog within organizations. Nothing is going to turn the brains of engineers off faster than an incentive system that punishes them retroactively for well-intentioned discussions about risk.
Yeah, I know, this is volume one hundred and something in a series, but it is such a crystal clear example of government licensing working primarily to protect incumbent competitors in an industry I have to share it.
Suppose you’re the owner of a taxicab company in a largish metropolitan area. One day you notice some taxis tooling around town—and they’re not yours. They belong to an upstart competitor. His cars are newer, his drivers are nicer, and his fares are lower. Pretty soon your profits start shrinking. What are you going to do about it?
You have a couple of choices. Option A: Invest a lot of money in new vehicles, customer-service training for your drivers, GPS systems to map faster routes and so on. A lot of expense. A lot of effort.
So you go for Option B: Invest a little money in a few politicians, who adopt a medallion law: Only licensed operators with city-issued taxi medallions may operate cabs. The oldest cab companies get first dibs on the medallions, at the lowest rates. Only a few medallions are left over for the new guy, and he can’t afford them anyway. Bingo—your competition problem is solved. The customers might not like it, but what are they going to do—walk?
Apparently this is exactly what is happening in DC
Now it’s the District of Columbia’s turn. Four members of the D.C. City Council have introduced a bill that would create a medallion system for the nation’s capital. Medallion prices would start at $250 for the most established taxi companies and, for the newer entrants, run as high as $10,000. At least initially. As time wore on, it’s likely that the price of a medallion would go up for everyone. That’s what has happened in places such as New York, where a government permission slip to drive a cab costs about $600,000. In Boston, which initially capped medallions at 1,525 in the 1930s—and more than a half-century later had added only 250 more—a medallion will cost you $400,000.
At present the District has more than 10,000 licensed taxi drivers; the proposed legislation would establish only 4,000 medallions. Needless to say, such artificially imposed scarcity also drives up prices. A study by Natwar Gandhi, the District’s chief financial officer, found that fares in cities with medallion systems are 25 percent higher than in cities with open taxi markets.
By the way, for extra points, here is a lawsuit right out of Atlas Shrugged
That story has played out in many cities across the United States, with sometimes amusing variations. A decade or so ago, Minneapolis (population 300,000-plus) allowed a grand total of 343 taxis to operate until Luis Paucar, an immigrant, filed suit. The city council decided to allow another 45 cabs. Then the existing cab companies sued, using the creative legal theory that they had a constitutional right not to face competition. (They lost.)